Checklist for Starting a Small Business Legally in India

Starting your own business is exciting — but before launching, it’s crucial to comply with legal and regulatory requirements. This step-by-step checklist will help ensure you’re on the right side of the law from day one.

1. Choose a Business Structure

• Sole Proprietorship – Simple, single-owner structure.
• Partnership Firm – Suitable for businesses with 2+ co-founders.
• LLP (Limited Liability Partnership) – Flexible and low-compliance option.
• Private Limited Company – Ideal for growth-stage businesses and startups seeking investment.

2. Register Your Business Name

• Unique and not already registered
• Not infringing on any existing trademark
• Reflective of your goods or services

Optional: Register a Trademark for brand protection.

3. Get PAN and TAN

• Apply for a PAN in the business’s name (if not a proprietorship).
• Apply for TAN if you will deduct TDS.

4. Register for GST

• Your annual turnover exceeds ₹20 lakh (₹10 lakh in some NE states)
• You are selling online (e.g., via Amazon, Flipkart)
• You are in inter-state supply of goods/services

5. Open a Current Bank Account

Use your PAN and proof of business registration (and often GST certificate) to open a dedicated current account in your business name.

6. MSME / Udyam Registration

Optional but recommended. Benefits include:

• Easier bank loans
• Subsidies and rebates
• Government scheme eligibility

Register online at: udyamregistration.gov.in

7. Shop & Establishment License

• Required in most states if you have a physical office/shop or employees on payroll.

8. Import Export Code (IEC) – If Applicable

Required for any import/export activity. Apply via the DGFT portal.

9. Professional Tax Registration

Applicable in states like Maharashtra, Karnataka, West Bengal, etc., if you have salaried employees.

10. Compliances & Accounting Setup

• Maintain books of accounts
• File monthly/quarterly GST returns (if applicable)
• Pay TDS and file returns
• File Income Tax Return annually
• Digitally store invoices and documents

Bonus: Hire a Tax & Legal Advisor

A professional can help you stay compliant, avoid penalties, and plan taxes efficiently.

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